Final Results
On-Line PLC
19 December 2002
ON-LINE PLC
('On-line' or 'the Company')
Preliminary Results for the Year Ended 30 June 2002
On-line today announces preliminary results for the year ended 30 June 2002.
Highlights:
• Revenues up by 58% to £2.32 million (2001 £1.46 million)
• EBITDA losses reduced by 34% to £549,000 (2001 £835,000)
• Net loss before tax reduced by £1 million despite heavy write-offs
• ADVFN.com Plc achieved positive cash flow and operational
profitability during second half of the year
• Advertwizard reorganised and focused going forward
• Akaei Plc undergoing restructuring to provide future potential
Michael Hodges, On-line's Chairman and Managing Director commented:
'We have come through a very difficult period and despite heavy write-offs have
improved our figures and with the reorganisations done and underway are well
positioned for the future.'
For further information, please contact:
On-line
Michael Hodges, Chairman and Managing Director - 020 8532 8924
Grant Thornton - Nominated Adviser
Graeme Thom - 020 7383 5100
Chairman's statement
Results
The past year has been a challenging and transforming period for On-line Plc
(On-line), in terms of overall trading and the implementation of changes
required to ensure the future prosperity of the Group. I am able to report that
even with poor stock markets conditions we have made good progress and have
entered the new financial year in a much better position than we did the last.
Group turnover for the year ended 30 June 2002 was 58% up at £2.32 million from
£1.46 million in the previous year and net losses before tax were reduced by
nearly £1million from £3.3million last year to £2.37million despite a heavy
program of write-offs described in more detail below.
Our EBITDA has improved by 34% from a loss of £835,000 to only £549,000 as can
be seen from the table:-
EBITDA - Earnings before interest, tax, depreciation, amortisation and exceptional 2002 2001
items £'000 £'000
Loss before tax - per financial statements (2,370) (3,302)
Amortisation 450 933
Exceptional item - Impairment 3,609 434
Exceptional item - Bad debt - 331
Exceptional item - Part disposal of subsidiary (2,974) -
Depreciation 685 835
Net interest 51 (66)
EBITDA (549) (835)
Although this year has been hard it has been a positive time for us in which we
have seen ADVFN.com PLC (ADVFN) continue to grow and build on the platform we
created for it. It has increased its user-base and greatly expanded its range of
products and services.
ADVFN's turnover for the year ended 30 June was £1.64 million up from £796,000
in the previous year. In addition to this 106% rise in sales for the full year,
there was an 88% growth in income for the final six months of the year compared
to the same period in the previous year which underscores the consistency of its
growth.
ADVFN's EBITDA has improved from a loss of £1,328,000 to only £355,000. It has
also adopted a very conservative and prudent policy on conducting its impairment
review including the writing off of significant research and development
expenditure.
Operating Review and prospects
It has always been our goal to level the playing field between private investors
and the professional and this we have achieved in the UK. The next step is a
much bigger share of the US market and it is there that ADVFN plans to build for
the next 12 months and beyond.
Akaei PLC (Akaei) sadly did not achieve the things we had hoped for during the
year. However, since the year end we have instigated many changes and have
commenced restructuring the company so that it should soon be in a position to
move forward in a new direction that we may all be able to benefit from. I hope
to be able to tell you more about this soon.
We took the decision to write down completely our investment in Akaei and at the
same time adopted a very conservative and prudent policy on conducting our
impairment review including the writing off of significant research and
development expenditure in both Akaei and Advertwizard and writing off all our
other costs involved in developing Advertwizard. This has however put us in a
stronger position going forward.
We are also making restructuring changes at Advertwizard and once this is
complete we plan to focus on Advertwizard and build an advertising sales force
as we have done at ADVFN.
Advertwizard now has a massive inventory of ads and with a sales team behind it
we feel it has great potential. More and more people are getting used to seeing
advertisements on the web and advertisers are starting to recognise it as a
valid way to promote a product or business. In addition, new ways to advertise
are appearing with not only banner ads but what are called Pop-ups and
Pop-unders. These are ads that appear either on top of a web page or behind it.
These types of ads are proving very effective and so we plan to build a
Pop-under/Pop-over network to sit alongside the existing Advertwizard network.
Summary
We are now in a much stronger position than we were 12 months ago and have cut
costs and are reorganising and refocusing. ADVFN has established itself as the
UK number one supplier of stocks and shares information to the private investor
via the Internet, Advertwizard is poised to benefit from the expected surge in
Internet advertising and Akaei is being reorganised to provide better
opportunities for the future.
I as always would like to thank you for your support and ask you to use our
products at ADVFN.com and Advertwizard.com.
Michael Hodges
Chairman
19 December 2002
Consolidated Profit and Loss Account
for the year ended 30 June 2002
Notes Continuing Discontinued 2002 2001
£'000 £'000 £'000 £'000
Turnover 406 1,914 2,320 1,464
Cost of sales (219) (472) (691) (946)
Gross profit 187 1,442 1,629 518
Administrative expenses
Exceptional item - impairment loss (733) (2,876) (3,609) (434)
Other (14) (3,276) (3,290) (3,452)
(747) (6,152) (6,899) (3,886)
Operating loss
Discontinued (4,472)
Acquisitions (238)
(4,710)
Continuing operations (560)
Total operating loss (5,270) (3,368)
Share of operating losses of associate (23) -
Exceptional item: profit on part
disposal of subsidiary 2,974 -
Net interest (51) 66
Loss on ordinary
activities before taxation (2,370) (3,302)
Tax on loss on ordinary activities - 2
Loss on ordinary
activities after taxation (2,370) (3,300)
Minority interest (294) 384
Loss sustained for the year (2,664) (2,916)
Loss per ordinary share 4
Basic (42.5p) (54.3p)
There were no recognised gains or losses other than the loss for the financial
year other than the exchange differences and goodwill previously written off to
reserves (see note 5).
Balance Sheets
at 30 June 2002
Group Group Company Company
2002 2001 2002 2001
Notes £'000 £'000 £'000 £'000
Fixed Assets
Intangible assets - 870 - 24
Tangible assets 61 3,154 46 113
Investments 1,302 207 1,500 1,662
1,363 4,231 1,546 1,799
Current Assets
Stocks 25 24 - -
Debtors 143 632 90 1,666
Cash at bank and in hand 270 589 222 81
438 1,245 312 1,747
Creditors: amounts falling due within
one year (812) (1,690) (427) (726)
Net current (liabilities)/assets (374) (445) (115) 1,021
Total assets less current liabilities 989 3,786 1,431 2,820
Creditors: amounts falling due after more
than one year (76) (100) (76) (94)
Minority interests 370 (646) - -
Net assets 1,283 3,040 1,355 2,726
Capital and Reserves
Called up share capital 3,199 2,904 3,199 2,904
Share premium account 2,095 1,928 2,095 1,928
Profit and loss account (4,011) (1,792) (3,939) (2,106)
1,283 3,040 1,355 2,726
Equity shareholders funds (1,576) 3,040 (1,504) 2,726
Non-equity shareholders' funds 2,859 - 2,859 -
Total shareholders' funds 5 1,283 3,040 1,355 2,726
The financial statements were approved by the Board of Directors on 19 December
2002
Consolidated Cash Flow Statement
for the year ended 30 June 2002
2002 2001
Notes £'000 £'000
Net cash outflow from
operating activities 6 (385) (1,396)
Returns on investment and
servicing of finance
Interest received - 97
Interest paid (51) (31)
(51) 66
Corporation tax paid - (7)
Capital expenditure
Payments to acquire intangible fixed assets (1,783) (969)
Payments to acquire tangible fixed assets (1,378) (2,425)
Receipts from sale of investments - 18
(3,161) (3,376)
Acquisitions and disposals
Net cash from part disposal of subsidiary (261) -
Part disposal of subsidiary 3,397 -
3,136 -
Net cash outflow before financing (461) (4,713)
Financing
Issue of ordinary share capital 473 638
Share issue costs (11) -
Loan advances 400 -
Loan repayments (229) -
Proceeds from sale and leaseback of assets - 152
Capital element of finance leases and hire
purchase contracts repaid (70) (65)
Net cash inflow from financing 563 725
Increase/(decrease) in cash 7 102 (3,988)
Notes for the year ended 30 June 2002
1. General
The financial information herein does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985.
The financial information has been extracted from the group's 2002 statutory
financial statements upon which the auditors reported on 19 December 2002. Their
opinion is unqualified and does not include any statement under section 237 of
the Companies Act 1985, but refers to the uncertainties surrounding the ability
of the Group to continue as a going concern (as described in note 2).
The accounts have been prepared in accordance with applicable accounting
standards and under the historical cost convention. The principal accounting
policies of the group have remained unchanged from the previous annual report,
except for the accounting policy for associated undertakings which applies for
the first time this year and the accounting policy on deferred tax which has
been amended following the adoption of FRS 19 (Deferred Tax). ). The adoption of
FRS19 has had no effect.
Copies of the annual report are being posted to shareholders and copies will be
available from the company's registered office at 642a Lea Bridge Road, Leyton,
London, E10 6AP.
2. Basis of preparing the financial statements
The company meets its day to day working capital requirements through a positive
cash balance and has a bank overdraft facility of £150,000 which has been agreed
since the year end. It is repayable on demand and renewable in September 2003,
when the directors believe it will be renewed.
The nature of the company's business is such that there can be considerable
unpredictable variation in the timing of cash inflows. Bearing this in mind, the
directors have prepared projected cash flow information for the period ending 31
December 2003 that includes a requirement to raise further funds early in 2003.
The directors believe on the basis of the review of the cash flow projections
that the existing facility of £150,000 together with the funds of £350,000
raised by the proposed sale of an investment in equity shares in January 2003
will be sufficient to allow the company to continue to operate within the
currently available facility including those from future fundraising. On this
basis, the directors consider it is appropriate to prepare the financial
statements on the going concern basis.
However, the margin of facilities over requirements is not large and there can
be no certainty that the sale of the an investment in equity shares would be
successful. Inherently there can be no certainty in relation to these matters.
The financial statements do not include any adjustments that would result from
the inability to raise the required funding.
3. Post balance sheet events
On 17 July 2002, the company issued 232,558 ordinary 5p shares to M J Hodges at
21.5p per share for cash consideration.
On 13 September 2002, it was agreed that the company would subscribe for
1,285,529 ordinary 1p shares in its subsidiary Akaei in consideration for the
release of the sum of £1,004,000 due from Akaei.
On 17 September 2002, the company exchanged 32.5m ordinary ADVFN shares for
440,000 ordinary 5p shares for a consideration of £1 per share in the New
Opportunities Investment Trust plc (NOIT). Additionally, the company was issued
with 88,000 Warrants to subscribe for NOIT shares at £1.
4. Loss per ordinary share
2002 2001
Number of Loss Number of Loss
Loss shares per share Loss shares per share
£'000 '000 p £'000 '000 p
Loss for the year (2,664) (2,916)
Weighted average number of shares 6,271 5,366
Basic loss per share (42.5p) (54.3p)
The options are anti-dilutive so there is no diluted loss per share.
5. Reconciliation of movements in shareholders' funds
Group Group
2002 2001
£'000 £'000
Loss for the financial year (2,664) (2,916)
Exchange differences (2) -
Receipts from issue of shares 462 638
Goodwill previously written off to reserves 447 -
Net decrease in shareholders funds in the year (1,757) (2,278)
Shareholders' funds at 1 July 3,040 5,318
Shareholders' funds at 30 June 1,283 3,040
6. Reconciliation of operating loss to net cash outflow from operating
activities
2002 2001
£'000 £'000
Operating loss (5,270) (3,368)
Amortisation 450 933
Depreciation 685 401
Impairment loss 3,609 434
Loss on disposal of tangible fixed assets 10 -
Exchange differences (2) -
Provision against investment - 243
Loss on sale of fixed asset investment 7 14
(Increase)/decrease in stocks (1) 18
Decrease/(increase) in debtors 39 (366)
Increase in creditors 88 295
Net cash outflow from operating activities (385) (1,396)
7. Reconciliation of net cash flow to movement in net debt
2002 2001
£'000 £'000
Increase/(decrease) in cash for the year 102 (3,988)
Loan advances (400) -
Loan repayments 229 -
Proceeds from sale and leaseback of assets - (152)
Finance leases transferred on part disposal of subsidiary 6 -
Cash outflow from capital repayments of hire
purchase and finance lease agreements 70 65
Movement in net funds in the year 7 (4,075)
Net (debt)/funds at 1 July (17) 4,058
Net debt at 30 June (10) (17)
8. Analysis of movement in net debt
At At
1 July 2001 Cash flow Disposal 30 June 2002
£'000 £'000 £'000 £'000
Cash in hand and at bank 589 (319) - 270
Overdraft (421) 421 - -
168 102 - 270
Debt - (171) - (171)
Finance leases (185) 70 6 (109)
(17) 1 6 (10)
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